Turkish President Recep Tayyip Erdogan/Bloomberg
The President’s warning came a day after Turkey’s regulators began an investigation into JPMorgan Chase and another probe of unspecified banks for stoking for the lira’s biggest plunge since last year’s crash.
Monday 25, March 2019
(Bloomberg) --Turkish President Recep Tayyip Erdogan warned that bankers deemed responsible for creating excessive demand for hard currency and making misleading predictions on foreign exchange rates will pay a heavy price after next week’s elections.
President Recep Tayyip Erdogan, said, “If you are soaking up foreign currencies from the market and engaging in provocative actions, there will be a heavy price for that.”
“Now, the banking regulator took some steps, but you should know that, we will make you pay a heavy price for that after the elections and all the work is being conducted by the Treasury and Finance Ministry,” added Erdogan.
Under pressure for weeks, the lira’s slump picked up pace last week amid speculation the decline in reserves signalled the central bank was using its holdings to prop up the currency before elections on 31 March.
The Turkish currency ended the day down more than five per cent, extending its loss for the year to over eight per cent in the world’s worst performance after Argentina’s peso.
“I am calling on those who are engaging in such activities ahead of the elections, we know the identities of all of you and we know what you are doing, Erdogan said.
The central bank’s holdings declined $6.3 billion in the two weeks through 15 March, the biggest decrease in the stockpile since January 2014. Last week, a central bank official said that did not represent any extraordinary development and mostly reflected repayments of foreign debt and sales of hard currency to state companies that purchase energy imports.